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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →The D.C. Circuit’s September 25, 2026 opinion upheld a willful-blindness instruction in Roman Sterlingov’s Bitcoin Fog case because the trial evidence could support an inference that he deliberately avoided learning about illicit activity facilitated by the service. The court did not rule that using a mixer—or operating one—by itself proves criminal intent. Its decision turns on the combined evidence in this trial and on whether the jury could be given that instruction.
What the D.C. Circuit decided
A federal jury convicted Sterlingov on March 12, 2024, of money-laundering conspiracy, sting money laundering, operating an unlicensed money-transmitting business, and violations of the D.C. Money Transmitters Act. In its September 25, 2026 opinion, the U.S. Court of Appeals for the D.C. Circuit affirmed the challenged district court decisions, including the decision to give the jury a willful-blindness instruction.
The appeal’s intent discussion addressed a specific trial question: whether the evidence supported telling jurors they could find knowledge through deliberate avoidance. It was not a freestanding ruling on the legality of cryptocurrency mixers, privacy-seeking transactions, or cryptocurrency use generally.
How the instruction treated knowledge
Deliberate avoidance, not carelessness
As the D.C. Circuit recounted it, the trial instruction told jurors they could find that Sterlingov “had knowledge of a fact” if he “deliberately closed his eyes to what would otherwise have been obvious to him.” It also warned that knowledge could not be established merely by showing he was “negligent, reckless, careless, or foolish.” Those are words from the trial court’s instruction as quoted in the appellate opinion, not a new legal test announced in this appeal.
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The opinion described willful-blindness instructions as appropriate in “rare circumstances” and said courts should be wary of using them. The parties agreed on the relevant formulation: such an instruction may be appropriate when a defendant claims a lack of guilty knowledge and the trial proof supports an inference of deliberate ignorance. The panel did not define the full boundaries of those rare circumstances.
Why the defense position mattered
Sterlingov argued that his defense was that he had not been involved with Bitcoin Fog, rather than that he did not know what its users were doing. The panel said that did not capture the whole defense: Sterlingov also disputed whether the government had proved that he saw an undercover agent’s messages explaining why the agent was using the service. The court therefore found that lack of knowledge was part of the issues the jury had to consider.
What evidence supported the instruction
The panel focused on the service’s design and operating choices together, rather than treating any single feature as conclusive. It said a reasonable jury could infer that Bitcoin Fog’s practices limited Sterlingov’s access to information about users and their bitcoin, and could also infer that the setup helped avoid indications that users were using the service for criminal purposes.
- Weekly automatic deletion: The court said jurors could infer that routinely deleting records limited access to information about users and their bitcoin.
- No account verification: The panel noted that Bitcoin Fog did not verify accounts.
- No questions to users: The opinion noted that the service asked users zero questions. A jury could view that alongside the lack of verification and record deletion as evidence supporting deliberate avoidance.
The court’s conclusion was that this record permitted the instruction—not that the features necessarily establish intent in another case. The appellate question was whether the jury could be instructed on deliberate ignorance given the evidence presented at Sterlingov’s trial.
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchWhat the ruling does not establish
- Mixing is not automatic proof of intent. The opinion does not hold that a person’s use of a mixer, privacy-seeking, or cryptocurrency transactions alone prove criminal knowledge.
- An inference is not a universal finding. The panel upheld the jury’s opportunity to draw an inference from this combination of evidence. A different prosecution must be evaluated on its own record.
- Negligence is not deliberate ignorance. The instruction expressly distinguished deliberate avoidance from being careless, foolish, reckless, or negligent.
- Government allegations should not be mistaken for appellate findings. The Department of Justice’s 2024 announcement describes the government’s account of Bitcoin Fog’s operation and trial evidence. Details in that release, including tracing claims, should be attributed to the government where the appellate opinion does not independently discuss them in the same terms.
For anyone comparing cryptocurrency prosecutions, the useful questions are what evidence bears on the defendant’s knowledge or deliberate avoidance; whether the defendant disputes involvement, knowledge, or both; how the service handled records and users; whether communications reached the defendant; what procedural issue the court reviewed; and whether transaction totals represent direct criminal-market flows, alleged proceeds, or total commingled volume.
How to read the Bitcoin Fog figures
The reported totals describe different measures and should not be treated as interchangeable. The DOJ’s 2024 release describes overall service volume and separately reports IRS Criminal Investigation’s analysis of direct transactions involving known darknet markets. Neither measure, by itself, means every bitcoin processed by the service was identified as criminal proceeds.
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| Figure | What it measures and who reported it |
|---|---|
| Well over 1.2 million BTC, valued at nearly $400 million at the time of the transactions | The DOJ’s 2024 description of Bitcoin Fog’s total volume. It is not a finding that every coin was independently identified as criminal proceeds. |
| More than $78 million in direct transactions involving known darknet markets | IRS Criminal Investigation analysis as reported by the DOJ in 2024. The DOJ breaks this into approximately 486,861.69 BTC received directly from darknet markets, valued at about $54,897,316 at transaction time, and approximately 164,931.13 BTC sent directly to such markets, valued at about $23,690,956 at transaction time. |
| Approximately $400 million versus Sterlingov’s proposed approximately $78 million | The D.C. Circuit’s 2026 opinion discusses these amounts in the sentencing-guideline calculation. It said Sterlingov had not met his burden to separate allegedly legitimate funds, but expressly did not reach constitutional or statutory objections to that burden. This sentencing analysis is not a general rule for proving criminal intent at trial. |
What cryptocurrency users and businesses can take from it
The decision is most relevant as a reminder that intent can be inferred from circumstances, including how a service is designed and operated, when the evidence supports that inference. It does not make privacy features or cryptocurrency use a substitute for proof of a crime. The practical distinction is between a jury being allowed to consider a combination of facts in one case and a rule that the same facts establish intent in every case.
The DOJ’s account also includes blockchain tracing, darknet-market links, fees and commissions, exchange accounts, and messages as parts of the government’s trial theory. Those details should be understood as the government’s account unless independently identified in the appellate opinion; a prosecutor’s description of evidence is not itself a court finding.
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